In an open economy, there is interaction with other economies in terms of both trading of goods and services and borrowing and lending

Wages in Baltonia are downwardly rigid. Which of the following will happen if a recession occurs in the country?

A) Employment will fall less than if wages were flexible. B) Unemployment will fall less than if wages were flexible. C) Employment will fall more than if wages were flexible. D) Unemployment will fall more than if wages were flexible.

A firm that reduces its research and development spending will expect competitor firms to reduce research and development spending as competition is reduced.

Answer the following statement true (T) or false (F)